Question

isposal of Fixed Asset Perfect Auto Rentals sold one of its cars on January 1, 2019....

  1. isposal of Fixed Asset

    Perfect Auto Rentals sold one of its cars on January 1, 2019. Perfect had acquired the car on January 1, 2017, for $13,500. At acquisition Perfect assumed that the car would have an estimated life of 3 years and a residual value of $3,000. Assume that Perfect has recorded straight-line depreciation expense for 2017 and 2018.

    Required:

    Prepare the journal entry to record the sale of the car assuming the car sold for (a) $6,500 cash, (b) $4,000 cash, and (c) $6,900 cash. The company recorded the car as equipment. If no entry is required, leave the answer boxes blank.

    a. Cash fill in the blank 2 fill in the blank 3
    Accumulated Depreciation fill in the blank 5 fill in the blank 6
    Equipment fill in the blank 8 fill in the blank 9
    Record sale of car
    b. Cash fill in the blank 11 fill in the blank 12
    Accumulated Depreciation fill in the blank 14 fill in the blank 15
    Loss on Disposal of Property, Plant, and Equipment fill in the blank 17 fill in the blank 18
    Equipment fill in the blank 20 fill in the blank 21
    Record sale of car
    c. Cash fill in the blank 23 fill in the blank 24
    Accumulated Depreciation fill in the blank 26 fill in the blank 27
    fill in the blank 29 fill in the blank 30
    Gain on Disposal of Property, Plant, and Equipment fill in the blank 32 fill in the blank 33
    Record sale of car
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Answer #1

Prepare the journal entry to record the sale of the car assuming the car sold for (a) $6,500 cash, (b) $4,000 cash, and (c) $6,900 cash. The company recorded the car as equipment. If no entry is required, leave the answer boxes blank.

a. Cash 6500
Accumulated Depreciation 7000
Equipment 13500
Record sale of car
b. Cash 4000
Accumulated Depreciation 7000
Loss on Disposal of Property, Plant, and Equipment 2500
Equipment 13500
Record sale of car
c. Cash 6900
Accumulated Depreciation 7000
Equipment 13500
Gain on Disposal of Property, Plant, and Equipment 400
Record sale of car
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